My DD (3yo) is usually a very sweet kid. We've been having MAJOR sleep issues and I know that those issues are contributing, but we're working on it.
One of the problems I face with her regularly is that she will lash out and hit, kick, etc. I have been firm with that is not okay, we do not do that, it hurts other people, etc. If she is repeatedly doing it or attempting to do it even though I'm sitting/standing/etc with her and other child (I do in home child care) I put her in time out (by time out, I mean, "Z, please sit down here for a couple minutes until you're calm").
That's not working. Her response to the use of time out was,
Z: Can I do *something she's not allowed*?
Me: No, you're not allowed to do that because..... *whatever reason*
Z: Oh. Well, how about I do it anyway, then go to time out, and then it's okay?
So she's not really getting the picture (or is understanding it better than I am!!). I want her to be internally motivated not to hit, kick, bite, etc. At the same time, I can NOT devote ten minutes to talking her through something with another child hurt and needing me.